Credit Myths I Hear All the Time

The one I hear most often: “I keep a small balance on my card every month because my dad told me it helps your score.” It doesn’t. That particular credit myth has probably cost people hundreds of dollars in unnecessary interest. There are a handful of beliefs like that floating around — things that sound like they should be true but aren’t — and some of them are actively hurting the scores of people who follow them.

I’ve been selling tradelines and talking to buyers about their credit situations for a while now. The same credit myths come up constantly. Here are the ones worth actually understanding.

[Related: buy tradelines from us or read the “Resources” section below]

Myth: Carrying a Balance Helps Your Score

This might be the most stubborn credit myth out there. The idea seems to be that keeping a small revolving balance demonstrates to the lender that you’re actively using credit. In reality, the scoring models don’t care whether you carry a balance. What they measure is your utilization ratio — the percentage of your available revolving credit you’re using at the time your statement closes. A $100 balance on a $1,000 card is 10% utilization, same as last month if you left $100 on there then too.

Paying your balance in full every month does not hurt your score. Carrying interest charges does not help it. The myth probably comes from confusing “using your credit card” (which does matter — a card you never use can sometimes stop reporting) with “carrying a balance.” Those are different things. Use the card, then pay it off. Keep utilization low — ideally under 10% or 15% — and you’re doing everything right.

Myth: Checking Your Credit Score Lowers It

This one stops people from monitoring their own credit, which is unfortunate because catching errors early is actually important. The confusion comes from not understanding the difference between hard and soft inquiries.

A hard inquiry happens when a lender pulls your credit as part of a credit decision — you’re applying for a card, a car loan, a mortgage, an apartment. That kind can ding your score by a few points, and it stays on your report for two years (though it only affects your score for about twelve months). A soft inquiry happens when you check your own score, or when a credit card company pre-screens you for an offer, or when an employer does a background check. Soft inquiries don’t affect your score at all.

Checking your own credit is always a soft inquiry. Do it regularly. If there’s an error on your report — a late payment that was reported incorrectly, an account you don’t recognize — you can’t dispute it if you don’t know it’s there.

Myth: Closing Old Credit Cards Improves Your Score

This one feels intuitive — if you’re not using an old card, closing it seems like tidying up. But it actually hurts in two ways. First, it reduces your total available revolving credit, which raises your utilization ratio. If you have $20,000 in available credit across four cards and you close one with a $5,000 limit, your available credit drops to $15,000. If your balances stay the same, your utilization goes up. Second, closing the card doesn’t immediately erase its history from your report (closed accounts can stay on your report for years), but eventually the account ages off and your average account age drops.

The practical advice: if an old card has an annual fee and you genuinely don’t use it, you can close it. But if it’s a no-fee card, especially one that’s been open a long time, leaving it open and making a small purchase on it every few months is almost always the right move. Aged revolving accounts are valuable — ask anyone who’s had a bank close one on them. (Bank of America once closed a card of mine with a $40,000 limit, which was a reminder of how much those accounts matter when they disappear.)

Myth: You Have One Credit Score

You have many credit scores, and they’re genuinely different numbers. Equifax, Experian, and TransUnion each maintain their own version of your credit file, and their data doesn’t always match — not all creditors report to all three bureaus. On top of that, FICO alone has multiple scoring versions (FICO 8, FICO 9, industry-specific models for auto or mortgage), and VantageScore runs a parallel system with different weightings. A “750” from one service is not the same calculation as a “750” from another.

What this means practically: when a lender pulls your credit, they’re probably using a specific scoring model you may not have access to. The free score on Credit Karma uses VantageScore; your mortgage lender is likely using a specific FICO version. The gap between the two can be meaningful. The overall trend across your scores matters more than obsessing over any single number.

Myth: Your Income Affects Your Credit Score

Income doesn’t appear in your credit report at all. Your score is built entirely from your credit behavior: payment history, how much of your available credit you’re using, how long your accounts have been open, what types of credit you have, and how recently you’ve applied for new credit. That’s it.

Lenders do ask for income when you apply — they use it to assess whether you can realistically repay — but it’s separate from the scoring model. Someone who makes a high salary and carries maxed-out cards will have a lower score than someone with a modest income who uses credit responsibly. The score measures behavior, not earning power. (That said, income tends to correlate with being able to keep balances low, which is probably why the myth persists.)

If you’re trying to improve your credit and these credit myths have been part of how you’ve been managing things, the short version of what actually works: pay on time, keep revolving utilization low, don’t close old cards, and check your own report regularly. If you want to explore what an authorized user tradeline might add to your specific situation, check the how the process works page — and if you’re ready to look at options, here’s what’s available.

Resources

The following is a list of resources to start learning about tradelines. We have a list of tradelines for sale, and a tradelines FAQ. Also various posts about tradelines, and a chart of tradeline prices from competitor sites. Finally, a contact form to ask further questions.

Please feel welcome to ask any questions below.

Things that I use, like, and am affiliated with:
Mint Mobile offers great cell phone service for $15 flat, get $15 off using the link. Get discounted phones with service activation and no contract.
I never spend money before I check Mr Rebates or Rakuten to get cashbacks, rebates, discounts, coupons or cheaper gift cards.